I recently finished Principles by Ray Dalio the founder of Bridgewater Associates which is one of the most successful privately held investment management companies in the country. I listened to one of his interviews and immediately ordered his book. I usually don’t spend a lot of time reading business books even though I am in business. This book was full of great applicable life values, management advice and work strategies. For a wildly successful investor, Ray Dalio is a very humble man or at least from my perception of him through his writing. The book is split into three parts, all equally satisfying but all three different. The first part is the background on Ray Dalio. It is a great autobiography in which he lays out his successes and failures with brutal honesty. The second part is his life principles. This part of the book focuses on the big picture of living and advice on how to structure our thinking. One big ticket item Dalio hits on is being radically opened minded and evolving throughout life. One of my favorite principles he writes about is that the individual’s incentives must be aligned with the group goals. This bleeds over from business to daily life, it encourages being a good citizen and employee. He points out that pain + reflection = progress, knowing our past failures and learning from them through examination will teach us, “There is no avoiding pain, especially if you’re going after ambitious goals.” This is important to remember because often times my generation has been known as weak and unwilling to face direct challenges. He has an excellent 5-step process of personal evolution: 1.) Have clear goals. 2.) Identify and don’t tolerate the problems that stand in the way of achieving those goals. 3.) Accurately diagnose the problems to get at their root causes. 4.) Design plans that will get you around them. 5.) Do what’s necessary to push these designs through to results. Another one of my favorites points Dalio makes is that it is vastly important to know history, psychology and science. These areas of study help you understand people therefore helping you understand how to live more effectively and be more successful in business. Radical open-mindedness is one of Dalio’s favorite principles throughout the book, “Sincerely believe that you might not know the best possible path and recognize that your ability to deal well with “not knowing” is more important than whatever it is you do know.” I found a lot of wisdom in the life principles section. The last part about work principles was extensive and insightful. Ray Dalio built Bridgewater as an “idea meritocracy.” That means that the best idea wins regardless of position or tenure. He breaks it down as: idea meritocracy= radical truth + radical transparency + believability – decision making. He also lays out an excellent work philosophy that must be revisited often, “Make your passion and your work one and the same and do it with people you want to be with. Work is either 1.) a job you do to earn the money to pay for the life you want to have or 2.) what you do to achieve your mission, or some mix of the two. I urge you to make it as much 2.) as possible, recognizing the value of 1.) If you do that, most everything will go better than if you don’t. In most businesses you are so micromanaged that a mistake seems like it could derail your career. Dalio points out, “I believe that great cultures, like great people, recognize that making mistakes is part of the process of learning, and that continuous learning is what allows an organization to evolve successfully over time.” Even though it is an age old adage: don’t say anything about someone you wouldn’t say to them directly is one of my favorite principles about work life. It is important for me to remember that throughout my career. Principles is one of my new favorite books because it is an honest look at personal and professional advice from a successful veteran. You should pick up this book because it is a 500 page mentor on how to become a better business minded professional and more socially aware individual.
Written by Michael McPhail
Ray Dalio
Brains and Brawn 